Philippine News and Stories

Recto’s Own Version of Sin Tax Bill Dismays DOF, DOH, BIR

The Senate version of the sin tax reform bill reported by Senator Ralph Recto brought much disappointment to the officials of Department of Finance and Department of Health, due to the huge difference between the expected outcome and the presented one.

Senator Recto proposed a 15-Billion peso increase in revenues from taxes rates imposed upon tobacco products and alcoholic drinks, instead of the expected 60-Billion revenue, as targeted by both Department of Finance and Department of Health.

According to Kim Henares, Commissioner of Bureau of Internal Revenue, the officials of the said 2 departments have exerted all their efforts in gathering and preparing the needed data of Recto for analysis and presentation of the proposed sin tax bill, which did not turn out as expected. “They put in hours of work, till the wee hours of the morning. A lot of them felt betrayed,” Henares said in a conference at the Department of Justice on Thursday.

Meanwhile, Senator Miriam Defensor-Santiago, one of the authors of the proposed sin tax law, also expressed her dismay as the presented bill did not reflect the goal of the said law which is to generate big funds for healthcare, but instead promoted the rich industry of the tobacco and alcohol industries.

“Under the Santiago bill, government will raise P60 billion for the first year. By contrast, the Recto bill will earn only P15 billion. The foregone revenue could go to universal health care, such as more hospitals, rural health units, and barangay health stations,” said Senator Santiago.

Recto on the other hand emphasized that increasing tax for alcohol and tobacco products would be unreasonable because this will affect the revenues of the said industries, brought about by decrease in its sales.

As a response, Henares said that promoting sales of tobacco products will in turn increase cases of smoking-related illnesses, thereby further increasing use of government funds.

“While the government collects P45 billion from tobacco taxes, it spends P144 billion to treat the four major ailments caused by smoking. So if no one is smoking, then the government will be saving P144 billion,” said Henares.

Presidential spokesperson Edwin Lacierda refused to say the reaction of Malacanang regarding the said bill, but emphasized on the probability of enjoying high revenues despite high government taxes. “For instance in Singapore, even if the sin taxes are high, they still enjoyed high revenues,” Lacierda said.